Join us today for the ongoing saga of steel maker US Steel (NYSE:X), whose potential sale really is starting to look like an economic soap opera already in progress. While there were already plenty of bidders involved, with Cleveland-Cliffs (NYSE:CLF) and ArcelorMittal (NYSE:MT) still hanging in there, the latest word suggests that new potential buyers are coming in from all over. US Steel ticked up fractionally on the news.
The latest word features Techint out of Argentina, who has a United States subsidiary called Ternium. Interestingly, reports note that Techint may not want all of US Steel’s assets, but rather, up to 90% of them, making it a potential dark horse bidding candidate if it throws in with someone else to cover the rest of the sale. Indeed, there are some bidders that are also interested in partial buys, according to word from CNBC, where Nucor (NYSE:NUE) might have an interest in teaming up with Stelco (OTHEROTC:STZHF) or even Steel Dynamics (NASDAQ:STLD), who both want a larger piece of the pie. Nucor, at last report, only has interest in very specific portions of US Steel, so it might just make the extra player that Techint might want.
And, in a move that will make a potential sale look that much more authentic, US Steel engaged in layoffs earlier today. It filed a WARN notice with Pennsylvania’s Department of Labor and Industry, informing them that, around January 2, it will let go of 105 people, most of whom worked in US Steel’s IT operations. US Steel wants to “restructure” that work, noted a report in the Pittsburgh Post-Gazette, and so it staged the layoffs. Of course, there would likely have been layoffs anyway should the sale go through and the new buyer starts considering redundancies. But at least there was plenty of advance notice, so hopefully those impacted will find new work rapidly.
Is US Steel a Good Stock to Buy?
Turning to Wall Street, analysts have a Hold consensus rating on X stock based on one Buy, three Holds and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average X price target of $33.50 per share implies 2.36% downside risk.
